Drainage districts organized or incorporated under this chapter may contract with each other, and with any political subdivision of this or any other state, and with districts organized or incorporated under any other law of this state or under the laws of any other state, for such outlets as the one may need and the other can furnish on such terms as may be deemed to be just and fair. The cost of obtaining the outlets shall be paid for as are other expenses of the district or political subdivision for making improvements. If the districts or district and political subdivision cannot agree upon the compensation to be paid for the outlet, the district supplying the outlet, by action in the circuit court of the county wherein the district or political subdivision for which the outlet is supplied is organized or located, may recover from the district or political subdivision fair and just compensation for supplying the outlet. Any compensation received by the district shall be applied to improving its ditches or levees or reducing taxation or indebtedness.